Bangladesh receives $78 million from World Bank for solar home system project

Government signs financing deal to develop its Rural Electrification and Renewable Energy Development II project, which aims to install 480,000 solar home systems.

The challenging landscape of Bangladesh has made grid connection efforts difficult and expensive.

Habib Munmun/Wikipedia

The World Bank's International Development Association (IDA), its soft loan arm, has pledged to back the government of Bangladesh with a loan of $78.4 million intended to add 480,000 solar home systems to the country’s electrification project.

The Rural Electrification and Renewable Energy Development II (RERED II) project is charged with bringing clean andreliable power to thousands of Bangladeshis without grid access to electricity. The solar home system (SHS) project will be implemented as a public-private partnership and will install 7,000 solar PV systems in homes across the country every month – making it the fastest-growing SHS project in the world.

Via the World Bank's support, Bangladesh already has an estimated three million solar home systems installed, which is merely a drop in the ocean when tackling the 58% of the population that do not have access to grid-connected electricity. The government of Bangladesh has targeted the goal of universal access by 2021, but the country’s scattered rural settlements and challenging terrain – much of Bangladesh lies below sea level and is criss-crossed by vast rivers – makes grid electrification a challenging and expensive undertaking.

"Together, the government of Bangladesh and the World Bank is scaling up a program that delivered development results for millions of rural Bangladeshis," said acting head of World Bank Bangladesh, Christine E. Kimes. "This is a proven model that works. Investing in electricity in rural areas empowers both men and women, leading to increased income and growth opportunities, and reducing poverty."

The initial RERED project, approved in 2002, was considered a success, leading to the creation of the RERED II project that has thus far delivered clean energy access to more than 414,000 households, impacting the lives of more than two million people in the process, and all via solar PV energy.

"This repeater project is building up on our efforts to support the government’s vision of providing universal access to electricity," said the Bangladeshi secretary for economic relations, Arastoo Khan. "The benefits of using solar homes systems include increased study time for children, empowerment of women through knowledge from TV viewing, income generation from mobile phone recharging services, as well as contribution to emissions reduction as a result of kerosene replacement."

The terms of the loan from the IDA include a 40 year maturity plan with a ten-year grace period and service charge of just 0.75%.